Keep in mind that there are two separate steps that must be achieved in order for a stand-alone application (.exe) that uses ArcObjects 10.0 to launch and work:
1. The application must bind explicitly to either the ArcGIS Engine Runtime product or the ArcGIS Desktop product, in other words, to one of the following folders:
C:\Program Files (x86)\ArcGIS\Desktop10.0\Bin
C:\Program Files (x86)\ArcGIS\Engine10.0\bin
In my experience, if your stand-alone application attempts to bind to Engine, e.g.
ESRI.ArcGIS.RuntimeManager.Bind(ESRI.ArcGIS.ProductCode.Engine)
but it does not find the ArcGIS Engine product installed on the machine, it will produce the error message you mention. In my experience, if you are using the License Control to license ArcObjects with an ArcGIS Engine license, you need to type the RuntimeManager.Bind call yourself. The License Manager is purely for indicating the license with which you want to initialize ArcObjects, not for telling the application with which product to bind (where it will find the ArcGIS binaries).
2. The application must be licensed with an ArcGIS Engine license or one of the ArcGIS Desktop licenses, either using IAoInitialize.Initialize() or using the License Control. You can also use the Add ArcGIS License Checking menu item under the Project menu in Visual Studio which launches the ArcGIS License Initializer dialog. There if you choose Engine, it will BOTH add code to bind to the ArcGIS Engine Runtime product and license with an ArcGIS Engine Runtime license.
Since you are using the License Control to license ArcObjects, I wonder if you have failed to add the call to RuntimeManager.Bind, which would be a separate step. This would be a common oversight when migrating from 9.x to 10.0.